2.11.3. Treasury Notes and Bonds

Question 1

What are Treasury notes?

Answer 1

They are coupon bonds with the maturity between 2-10 years

Question 2

What denominations are Treasury Notes issued in?

Answer 2

$100 -$5 millin

Question 3

How often do Treasury Notes pay interest?

Answer 3

Semi-annually(twice a year)

Question 4

Are Treasury Notes callable?

Answer 4

No

Question 5

What are Treasury Bonds?

Answer 5

They are coupon securities having maturities from 10-30 years.

Question 6

What denominations are Treasury Bonds issued in?

Answer 6

$100-$5million

Question 7

How often do Treasury bonds pay interest?

Answer 7

Semi-annually

Question 8

Are Treasury Bonds callable?

Answer 8

They do have a call feature. Prior to 1985 they were issued with a 5 or 10 year call feature. Not more of those have been issued anymore; however, it is not precluded from doing so in the future.

Question 9

What is a long bond?

Answer 9

A bond with the maturity of 30 years. It serves as a benchmark of long-term financing in the U.S. and an indicator of the direction of interest rates